Metals News
Xstrata Reaches Deal with Sudbury Nickel Miners
industry news
Feb 2,2010

TORONTO, Feb. 2 -- Anglo-Swiss miner Xstrata Plc (XTA.L: Quote) reached a tentative deal with unionized workers at its Canadian nickel mining operations in Sudbury, Ontario, on Monday, averting a strike that would have all but shut down base metals production in the Sudbury region.

Talks between the company and workers -- represented by the Canadian Auto Workers -- extended several hours past a Sunday strike deadline, before an agreement was reached.

"We are very pleased to have reached this tentative agreement. We believe the new offer is fair and equitable, addressing the needs of both the company and employees," Xstrata said in a statement.

Xstrata's Sudbury operations consist of its Nickel Rim South project as well as a mill and a smelter. The smelter processes nickel and copper concentrate from Xstrata operations in Canada and Australia.

Earlier on Monday, Xstrata released 2009 production data showing the company's total mined nickel output rose 4.6 percent to 57,052 tonnes.

This represents about 5 percent of global output.

In a statement on its website, the Canadian Auto Workers union also called the tentative deal fair and equitable.

A ratification vote is expected to be held early this week.

About 570 workers had been set to walk off the job if a deal had not been reached.

Jerry Dias, assistant to the union's president, told Reuters on Sunday that key issues in the last-minute negotiations were pension plans, an employee "nickel bonus" tied to the price of the metal, as well as recall rights for hundreds of workers laid off early last year.

Those layoffs followed a sharp drop in nickel prices from a 2007 high of nearly $25 a pound to a low of around $4 a pound in December 2008. The price has rebounded slowly, and was around $8.20 on Monday.

That represented a drop of about 3 percent from Friday, but it was unclear how much of that was due to the Xstrata labor deal, as base metals prices in general were lower.


The labor talks have taken place in the shadow of a strike of more than 3,000 workers at Brazilian miner Vale's (VALE5.SA: Quote) Sudbury nickel and copper operations, and smaller strikes at Vale's Voisey's Bay mine in Eastern Canada and at its Port Colborne, Ontario, processing operations.

The Vale Sudbury strike is now in its seventh month, with no signs that bargaining will restart any time soon.

Some analysts have speculated a deal at Xstrata could spur Vale and the United Steelworkers union to restart talks.

Vale was not immediately available for comment.

Both Xstrata and Vale acquired their Sudbury assets in late 2006, when they took over Canadian miners Falconbridge and Inco, respectively.


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